In electrical engineering, the power factor of an AC electrical power system is defined as the ratio of the real power (W) flowing to the load to the apparent power (Va) in the circuit and is a dimensionless number in the closed interval of −1 to 1. A power factor of less than one means that the voltage and current waveforms are not in phase, reducing the instantaneous product of the two waveforms (V × I). Real power is the capacity of the circuit for performing work in a particular time. Apparent power is the product of the current and voltage of the circuit. Due to energy stored in the load and returned to the source, or due to a non-linear load that distorts the wave shape of the current drawn from the source, the apparent power will be greater than the real power. A negative power factor occurs when the device (which is normally the load) generates power, which then flows back towards the source, which is normally considered the generator.
In an electric power system, a load with a low power factor draws more current than a load with a high power factor for the same amount of useful power transferred. Electric motors, transformers ,fluorescent lamps, air conditioners are good examples for this with their high reactive power requirements. The higher currents increase the energy lost in the distribution system, and require larger wires and other equipment. Because of the costs of larger equipment and wasted energy, electrical utilities will usually charge a higher cost to industrial or commercial customers where there is a low power factor.
Therefore it’s preferable to have a power factor value close to 1.
